Turbulence at Eskom threatening mining industry – experts

Prolonged wage negotiations at Eskom have plunged the country into load shedding again – and the instability at the power utility is also affecting the productivity and production costs of the gold mining sector, an expert warned.

The continued threat of load shedding, along with the increase in electricity prices, has made it difficult for the industry to remain profitable, with much of its operating costs now going towards keeping the power on – and the Eskom strikes are threatening to result in a mining strike.

Mining and energy expert Ted Blom yesterday said the looming wage dispute in the gold mining sector could be laid at the door of the electricity utility.

The Minerals Council told The Citizen this week mining companies’ production costs were rocketing because of Eskom’s increasing prices. This was one of the main factors weakening the industry’s ability to meet their workers’ wage demands, it said.

This, coupled with a poorly managed negotiation process at Eskom, could set in motion a wave of job losses and intensified industrial action across energy-intensive industries such as mining, said Blom.

The more than R40 trillion lost by Eskom the past 10 years, coupled with overcharging, could be directly linked to wage constraints in mining, he said.

The Minerals Council, which represents mining employers, said more than 20% of its production costs were attributed to utilities, the bulk of which was from buying electricity from Eskom.

This and the 53% of production costs going to labour – the only factor under the industry’s control – meant sacrifices needed to be made to prevent further job losses in the industry.

Mining unions last week insisted their employers could afford wage hikes far above inflation. They had rejected a 3% to 4.5% wage increase for miners and artisans and a 5.5% to 6.5% for category four underground employees.

Eskom yesterday sent out a warning of possible stage 1 load shedding after reports of blockages at six power stations, purportedly as a result of industrial action.

Although the blame has once again been put on workers for Eskom’s supply challenges, Blom echoed unions’ complaint that the utility had unnecessarily prolonged and complicated this year’s wage negotiations, leaving workers increasingly frustrated.

Helen Diatile, chief negotiator at the National Union of Mineworkers, said the union could not be held responsible for the reported incidents at various power stations as it had not given orders for workers to embark on strike action – but its leadership was looking into the matter.

She warned, however that the situation could get out of hand if an agreement was not reached by Friday.

“Eskom proposed that we meet again [on Tuesday] and we are hoping that negotiations will be complete by Friday.

“We have never given orders for strike action, but if there is no leadership among workers they may take matters upon themselves,” Diatile said. “These negotiations have taken too long now and we are concerned the situation can get out of hand.”

– simnikiweh@citizen.co.za

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